Brassington dodges questions on Marriott Hotel

Mar 13, 2014 News

… displays rude, vulgar behaviour

Chairman of Atlantic Hotels Inc, (AHI) Winston Brassington, yesterday continued dodging from Kaieteur News on the Marriott Hotel issue. So rude was Brassington that when he answered his mobile phone, he drew (sucked) his teeth and hung up. Continuous calls were made after that to Brassington but he refused to answer.
Attempts were also made to contact the Minister of Finance Ashni Singh. Those calls were all unanswered. Junior Finance Minister, Bishop Juan Edghill, who was the only person to answer his phone, when questioned about the private investors at the Marriott Hotel said that he was not in possession of the documents.

The View of the Marriott shorefront recently

It’s almost more than five months since a commitment by Brassington to disclose who the US$8 million equity private investor would be. Brassington had made several assurances that the public would know the face of the investor. However the identity remains a mystery.
Further, when this newspaper visited the construction site yesterday, work appeared to be at a “stand still.” No one present was willing to speak to this newspaper.
One source explained that “slow up” in construction was probably due to the fact that the project has not been able to secure financing from Republic Bank of Trinidad and Tobago. That bank was approached to prepare an investor friendly package to source U$S27M for the project.
The Guyana Government is, to date, the sole investor in the Georgetown Marriott Hotel given that AHI is yet to have financial closure for US$39M of the US$58.5M required for its completion.
NICIL has already injected its US$20M, which it had committed to the project so it is unclear what the source of financing is for the works currently being executed.
Prior to the NICIL money, Government had given Courtney Benn a US$1M contract for the rerouting of the sewerage system in the Kingston locale.
That contract was pulled after more than US$700,000 was paid over. It was then given to an overseas company this time for a further US$2M.
AHI also leased the prime seven acres of shorefront property on which the Hotel rests for a measly US$120 (G$24,000) per month with the option to buy.
The Food and Drug Department which had a building in the locale was removed and that property was dismantled.
Brassington, last September, held a special media briefing on the project and told reporters that while the AHI would have executed a number of agreements with Republic Bank and the private investor, whom he is still to name, there is no definitive financial closure for the money as yet.
He said, then, that AHI was looking to have this aspect of the deal concluded by year end (2013), so that the hotel could be completed and opened this year. “We haven’t closed but we have every confidence it will close soon,” Brassington had said.
That unnamed private investor is expected to put in US$8M in the project and will have majority ownership of AHI, equivalent to 67 per cent shares in the company while government will own 33 per cent.
Equity for the project will be coming from the unnamed private investor in the sum of US$8M, as well as another US$4M to be invested by the National Industrial and Commercial Investment Limited (NICIL). The remainder of the money will be in the form of debt/loans.
Republic Bank has been asked to solicit a total of US$31M, to be repaid at an interest rate of 8.9 per cent, while NICIL will be lending US$15.5M with zero per cent return.
According to a feasibility study undertaken for the project by a Miami-based HVS Consulting and Valuation, the Senior Debt, solicited by Republic Bank will receive payment before the preferred equity, the NICIL equity, and the NICIL debt.
As it relates to the US$15.5M lent to the project by NICIL, this will be repaid “when cash flows enable.” Incidentally, five years after the hotel begins its operations it will take on an additional loan of US$5M.
Repayment of this loan will also take priority over the NICIL loan.
The unnamed private investor scheduled to put in US$8M, in the Georgetown Marriott Hotel is projected to rake in approximately US$46M by the end of 10 years.
This is documented in the extract of the feasibility report which was released to the media.
According to reports, during the first three years of the hotel’s operation, AHI will pay the still to be named private investor US$1.3M.
From year four of the hotel’s operation, the unnamed private investor will be paid US$1.2M each year for the next six years.
According to the report, in year 10 of its operation, that unnamed private investor will be paid a whopping US$37.2M, setting the rate of return over the 10 year period at 22.2 per cent.
The feasibility study done for the Marriott Hotel has included in its projections for the success of the Marriott Hotel, that “we have assumed” that a portion of the nation’s economic development initiatives are realized.”
The report says, “These include but are not limited to the cultivation of a portion of Guyana’s crude oil.”
This would mean that included in the factors that would make the Marriott feasible for the country is the need for Guyana to find oil. This is yet to happen.
Included in the agreement signed, the Hotel will enjoy a 10 year waiver on corporate, property taxes which will commence from the first year of commercial operations.
The Marriott Hotel will also enjoy relief from import duty, VAT, excise tax, and any other import fees, taxes, duties on machinery, equipment, building and other materials, fixtures and fittings and furnishings and non-luxury vehicles required by the developers for the construction of the Project.
During operations, relief will be granted from duty and excise tax on capital repairs or replacements greater than US$10,000 in value within 10 years of operations.